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September 23, 2003

New Software Helps States Manage Medicaid Expenditures

Researchers at the Johns Hopkins Bloomberg School of Public Health have developed the new ACG-Medicaid computer software to help states manage Medicaid funds more efficiently and effectively. The ACG System, which stands for Adjusted Clinical Groups, is a risk assessment tool that enables health care providers, insurers, and health maintenance organizations to describe or predict a population’s past or future health care utilization and costs. ACGs are widely used to set “risk-adjusted” capitation payments for health plans and doctor groups to make sure the budget matches enrolled patient needs. ACG-Medicaid is a streamlined version of the original ACG-Case Mix software used since 1991. The new program will be offered, free-of-charge, to qualified state Medicaid programs. The ACG System is currently used in Maryland, Minnesota, Arkansas, Alabama, Oklahoma, and other states to manage billions of state health care expenditures.

“We are gratified that our software system is widely used in the U.S. private sector and in government programs in other countries to help improve the quality, efficiency, and equity of care for tens of millions of patients. We developed this special version to make it easier for more states to gain access to our technology as well,” saidJonathan Weiner, DrPH, professor of health policy and management and one of the developers of the ACG System. “By using the special Medicaid version of the ACG software to more fairly pay health plans and doctors, states will be able to protect their sickest patients while facing current fiscal challenges.”

ACGs arose from groundbreaking work conducted in the 1980s by Barbara Starfield, MD, MPH, and her Johns Hopkins colleagues on the relationship between the presence of multiple co-morbidities, and service-use in managed care settings. This research has grown into one of the most successful technology transfer projects in the history of Johns Hopkins University.

The ACG system applies special copyrighted logic to group each patient into a health status category based on the diagnosis codes that their doctors note in their insurance records. The Johns Hopkins ACG system has many applications, including public health research, medical management, and health care finance.

Computer Science Corporation (CSC) is the exclusive distributor of the ACG System software.

Information about ACG-Medicaid is available at and at
Public Affairs Media Contacts for the Johns Hopkins Bloomberg School of Public Health: Tim Parsons or Kenna Brigham at 410-955-6878 or Photographs of Jonathan Weiner are available upon request.